Once a company becomes an industry leader, its employees, from top to bottom, start thinking defensively. Suddenly, people feel they have more to lose from challenging the status quo than upending it. As a result, one-time revolutionaries turn into reactionaries. Proof of this about-face comes when senior executives troop off to Washington or Brussels to lobby against changes that would make life easier for the new up and comers.

Years of continuous improvement produce an ultra-efficient business system—one that’s highly optimized, and also highly inflexible. Successful businesses are usually good at doing one thing, and one thing only. Over-specialization kills adaptability—but this is a tough to trap to avoid, since the defenders of the status quo will always argue that eking out another increment of efficiency is a safer bet than striking out in a new direction.

Long-tenured executives develop a deep base of industry experience and find it hard to question cherished beliefs. In successful companies, managers usually have a fine-grained view of “how the industry works,” and tend to discount data that would challenge their assumptions. Over time, mental models become hard-wired—a fact that makes industry stalwarts vulnerable to new rules. This risk is magnified when senior executives dominate internal conversations about future strategy and direction.

With success comes bulk—more employees, more cash and more market power. Trouble is, a resource advantage tends to make executives intellectually lazy—they start believing that success comes from outspending one’s rivals rather than from outthinking them. In practice, superior resources seldom defeat a superior strategy. So when resources start substituting for creativity, it’s time to short the shares.

One quick suggestion: Treat every belief you have about your business as nothing more than a hypothesis, forever open to disconfirmation. Being paranoid is good, becoming skeptical about your own beliefs is better.

Netflix could buy 10 top quality screenplays per year with the cash they’ll spend on that one job.  They must have big plans for AI.There are also a half dozen AI job openings at Disney. And the tech-based streamers (Apple, Amazon) already have made big investments in AI. Sony launched an AI business unit in April 2020—in order to “enhance human imagination and creativity, particularly in the realm of entertainment.”

When Spotify launched on the stock exchange in 2018, it was losing around $30 million per month. Now it’s much larger, and is losing money at the pace of more than $100 million per month.

But the real problem at Spotify isn’t just convincing people to pay more. It runs much deeper. Spotify finds itself in the awkward position of asking people to pay more for a lousy interface that degrades the entire user experience.

Boredom is built into the platform, because they lose money if you get too excited about music—you’re like the person at the all-you-can-eat buffet who goes back for a third helping. They make the most money from indifferent, lukewarm fans, and they created their interface with them in mind. In other words, Spotify’s highest aspiration is to be the Applebee’s of music.

They need to prepare for a possible royalty war against record labels and musicians—yes, that could actually happen—and they do that by creating a zombie world of brain dead listeners who don’t even know what artist they’re hearing. I know that sounds extreme, but spend some time on the platform and draw your own conclusions.